LATEST ECONOMIC BRIEFINGS
EMIRATES: DUBAI | 30.07.2010
Dubai’s capital markets appear to be in for significant change with plans unveiled to establish a second-tier stock exchange coming hot on the heels of Dubai Financial Market (DFM) – the government-administered domestic bourse – and the DIFC-based NASDAQ Dubai’s move to formally link their trading platforms. All of this is happening as speculation of a merger between the bourses of Dubai and Abu Dhabi mounts.
ALGERIE | 30.07.2010
Les efforts importants déployés par l’Algérie pour augmenter la production céréalière commencent à porter leurs fruits, dans la mesure où les récoltes record de l’année dernière et les rendements importants de 2010 aideront à réduire les coûts d’importation et à créer des emplois sûrs dans les zones rurales. Cependant, l’objectif de l’autonomie alimentaire fixé par le pays reste encore bien éloigné.
SENEGAL | 30.07.2010
Le Sénégal est en train de devenir un leader en matière de développement de l’énergie solaire comme énergie de l’avenir, et ce, à la fois à l’échelle nationale et continentale. Pour y parvenir, le pays veut augmenter l’utilisation des énergies renouvelables afin de surmonter ses propres manques et promouvoir un grand programme international ayant pour but de mettre fin à la dépendance de l’Afrique de l’Ouest à l’égard des combustibles fossiles.
BULGARIA | 30.07.2010
Though Bulgaria’s economy is likely to remain in the slow lane for the rest of this year, the country’s banking sector continues to show resilience in the face of global economic contraction. There are concerns, however, that increasing levels of bad loans carried by some lenders could add to pressures on the sector.
OMAN | 28.07.2010
A raft of new agreements recently signed by the Ministry of Transport and Communications will see a significant round of investment in Oman’s transport infrastructure. The 15 agreements, signed earlier in July, cover projects in land, sea and air infrastructure and are worth a total of OR136.9m ($355.9m).
COUNTRY COVERAGE
Room for Retail
, Volume 50
29.09.2004
29.09.2004
Despite news that the Emirates' retail sector is continuing its rapid expansion - both in terms of physical size and profitability - there was a note of caution sounded this week. The warning, coming from a respected international retail analyst, said the sector should not be complacent, particularly when taking into account the rise of global retail rivals. Looming large on this horizon was the Far Eastern giant China, which looks likely to soon become the Emirates' main overseas trading partner.
As September drew to a close, Retail International (RI), a UK-based independent retail consultancy, reported that throughout the UAE, the amount of retail space was increasing at a fast pace, and with Dubai leading the way. Within the next five years, Dubai's share of the Emirate's total retail space will jump from the current 17% to 34% - indicating a further 1.5m sq metres in use by 2009.
This also places the emirate in a leading position in the wider region. According to RI figures, the main concentrations of new retail space in the Middle East currently are Dubai (631,000 sq metres), Jeddah (595,000 sq metres), Abu Dhabi (460,000 sq metres) and Riyadh (411,000 sq metres).
With new investments in retail in Dubai expected to reach $10bn by 2010, it is therefore a good choice of venue for the Middle East Council of Shopping Centres (MECSC) to hold its convention. Meeting from October 4-7 at the Jumeirah Beach Hotel's Convention Centre, the conference unsurprisingly has the full official endorsement of the Dubai Convention Bureau/Department of Tourism and Commerce Marketing (DTCM).
"The official support from the DTCM is a tremendous boost to the MECSC's commitment and efforts to keep the Middle East's shopping centre professionals at the forefront of global retail developments," Kim Redman, regional director of the MECSC told the Khaleej Times on September 29.
Yet it is not only the high end of the retail trade, with its shopping centres and complexes, that has been experiencing major growth recently.
At the lower end of the sector, the number of grocery retail outlets in the UAE has grown by 47% between 1998 and 2004, according to recent research by international retail trackers MEMRB.
"We see an overall growth in all channels of the grocery business in the UAE," Anna P Latzias, MEMRB associate director for the Gulf and Iran told the Khaleej Times. "However, there has been phenomenal growth in the baqala [small grocer] segment driven by the explosive growth in the number of apartment buildings necessitated by the significant growth in population, especially in Sharjah and Dubai."
The traditional small baqala has maintained its dominance over local convenience purchases, while many have also expanded in size to become mini-supermarkets. The average size of these larger stores is around 185 sq metres.
The death of the baqala widely predicted by the entrance into the grocery market of giant stores - with Carrefour, Spinneys and Lulu all now operating in the Emirates - has not occurred. Instead, the baqala has expanded its product range and size, while maintaining its local links and market share. In addition, Latzias said, the high number of single males in the UAE population (due to the large numbers of migrant labourers) provides the small local store with plenty of customers. As a result, in terms of market share, smaller grocers still account for about 90%, roughly the same figure as in 1998. The super/hypermarket segment accounts for just 1.5% of the total and self-service 8%.
However, at the higher end of the grocery market, competition is also set to increase next year as big global players like Geant move into the Emirates and Carrefour comes on-stream. This is likely to drive down prices, a factor which could see the end of many small- and medium-sized supermarkets and their possible replacement by branded convenience stores (C-stores) targeting niche segments. There is also likely to be heavier pressure on the Indian supermarket chains that have so far been dominant - such as Panda, Giant and al-Othaim.
There are also likely to be some squeezes on the Emirates' retail sector in the future from more global competition - at least according to RI.
Simon Thomson, RI Principal, warned late September that "The region needs to guard against complacency." This was because over the eastern horizon, something was stirring - and beginning to divert global retail investments.
"The rapid rise of wealth in China, India and Russia and their massive population growth is attracting the attention of world retailers," he continued. "Even remote villages in these huge countries will be within easy reach of leading global brands."
This was an interesting point to make in the UAE at that time, coming as it did the day after the Chinese Ambassador to the UAE, Zhang Zhijun, had celebrated his country's 55th anniversary by praising relations with the UAE.
And well he might too, as there has been a tremendous increase in trade between China and the Emirates over the past 20 years. In 1984, when diplomatic relations were established, Chinese exports to the UAE stood at $70m. Last year, they were $8.5bn - setting up China to become the Emirates' leading trade and business partner in a very short while.
Food for thought in the Emirates then, both in the baqala and the hypermarket.
As September drew to a close, Retail International (RI), a UK-based independent retail consultancy, reported that throughout the UAE, the amount of retail space was increasing at a fast pace, and with Dubai leading the way. Within the next five years, Dubai's share of the Emirate's total retail space will jump from the current 17% to 34% - indicating a further 1.5m sq metres in use by 2009.
This also places the emirate in a leading position in the wider region. According to RI figures, the main concentrations of new retail space in the Middle East currently are Dubai (631,000 sq metres), Jeddah (595,000 sq metres), Abu Dhabi (460,000 sq metres) and Riyadh (411,000 sq metres).
With new investments in retail in Dubai expected to reach $10bn by 2010, it is therefore a good choice of venue for the Middle East Council of Shopping Centres (MECSC) to hold its convention. Meeting from October 4-7 at the Jumeirah Beach Hotel's Convention Centre, the conference unsurprisingly has the full official endorsement of the Dubai Convention Bureau/Department of Tourism and Commerce Marketing (DTCM).
"The official support from the DTCM is a tremendous boost to the MECSC's commitment and efforts to keep the Middle East's shopping centre professionals at the forefront of global retail developments," Kim Redman, regional director of the MECSC told the Khaleej Times on September 29.
Yet it is not only the high end of the retail trade, with its shopping centres and complexes, that has been experiencing major growth recently.
At the lower end of the sector, the number of grocery retail outlets in the UAE has grown by 47% between 1998 and 2004, according to recent research by international retail trackers MEMRB.
"We see an overall growth in all channels of the grocery business in the UAE," Anna P Latzias, MEMRB associate director for the Gulf and Iran told the Khaleej Times. "However, there has been phenomenal growth in the baqala [small grocer] segment driven by the explosive growth in the number of apartment buildings necessitated by the significant growth in population, especially in Sharjah and Dubai."
The traditional small baqala has maintained its dominance over local convenience purchases, while many have also expanded in size to become mini-supermarkets. The average size of these larger stores is around 185 sq metres.
The death of the baqala widely predicted by the entrance into the grocery market of giant stores - with Carrefour, Spinneys and Lulu all now operating in the Emirates - has not occurred. Instead, the baqala has expanded its product range and size, while maintaining its local links and market share. In addition, Latzias said, the high number of single males in the UAE population (due to the large numbers of migrant labourers) provides the small local store with plenty of customers. As a result, in terms of market share, smaller grocers still account for about 90%, roughly the same figure as in 1998. The super/hypermarket segment accounts for just 1.5% of the total and self-service 8%.
However, at the higher end of the grocery market, competition is also set to increase next year as big global players like Geant move into the Emirates and Carrefour comes on-stream. This is likely to drive down prices, a factor which could see the end of many small- and medium-sized supermarkets and their possible replacement by branded convenience stores (C-stores) targeting niche segments. There is also likely to be heavier pressure on the Indian supermarket chains that have so far been dominant - such as Panda, Giant and al-Othaim.
There are also likely to be some squeezes on the Emirates' retail sector in the future from more global competition - at least according to RI.
Simon Thomson, RI Principal, warned late September that "The region needs to guard against complacency." This was because over the eastern horizon, something was stirring - and beginning to divert global retail investments.
"The rapid rise of wealth in China, India and Russia and their massive population growth is attracting the attention of world retailers," he continued. "Even remote villages in these huge countries will be within easy reach of leading global brands."
This was an interesting point to make in the UAE at that time, coming as it did the day after the Chinese Ambassador to the UAE, Zhang Zhijun, had celebrated his country's 55th anniversary by praising relations with the UAE.
And well he might too, as there has been a tremendous increase in trade between China and the Emirates over the past 20 years. In 1984, when diplomatic relations were established, Chinese exports to the UAE stood at $70m. Last year, they were $8.5bn - setting up China to become the Emirates' leading trade and business partner in a very short while.
Food for thought in the Emirates then, both in the baqala and the hypermarket.
